Microsoft has faced some tough competition before, but what's particularly challenging about Linux and open source is that, this time, Microsoft isn't just competing with another product and company - it's competing against a whole different business model.

The competition is exciting, and can only benefit users of both Microsoft and open source. Indeed, Microsoft's own customers are among the biggest beneficiaries. Microsoft learns from its competitors business practices, adapts them and adopts them as its own.

No, strike that. Microsoft doesn't just "learn from" its competitors' business practices and technologies. It steals them. Let's not try to pretty it up.

The result is good for everybody except Microsoft's competitors. At first, at least. It's certainly good for the competitor's customers - at least at first - because the competitor has to put every effort into keeping the customers' business. There's nothing worse for a business's customers than when the business has it easy.

But the problem with this competitive process is that eventually it comes to an end. Microsoft wins, Microsoft relaxes, the competitor's customers often become Microsoft customers and have to take what Redmond is putting out.

Microsoft's major competitors have, in the past, included IBM, Borland, Novell and of course Netscape. In each case, Microsoft adopted a three-fold strategy for competition: First, Microsoft sharpened its own, competing technology: Competition with IBM and Novell resulted in the introduction of and improvements to Windows NT, competition with Borland resulted in improved development tools, competition with Netscape resulted in improvements to the Microsoft browser and web servers.

The second prong of Microsoft's competitive strategy is to offer low prices and bundling deals to make Microsoft products more attractive than the competition.

Which leads to strategy #3, the one that leads to the presence of Bill Gates's picture on so many dartboards: Dirty tricks. Microsoft blackmails PC vendors to get them to stop supporting competitive products, it proposes alliances with competing vendors and then uses the competitors' secrets in Microsoft products. And that's where customers are hurt, because their freedom of choice is diminished.

The ultimate goal, for Microsoft: Cut off the competition's supply of money, by strangling revenue from customers, investors, and cutting off access to sales channels.

But now, Microsoft faces some unique competitive conditions. Open source isn't produced by one company, it's produced by a legion of developers, some working for private companies who get their profit from customizing, and servicing open source, or selling hardware that open source runs on. Other developers are working for free. It's hard to cut off the money supply for technology that doesn't require much money to survive, and which has a great many sources of revenue, investors and channels.

Microsoft can't compete on cost. Linux and open source software is has, of course, no licensing cost. Linux and open source runs on the same Wintel architecture that runs Microsoft software - often requiring less powerful hardware. And, as we reported last week, Linux staff works cheaper than Microsoft support; that's bad for Linux job-seekers but good for the people who hire them.

But Microsoft is adapting. Linux Pipeline is running an interview with Martin Taylor, Microsoft's top anti-Linux general. Taylor describes plans to compete with Linux, including segmenting the market into small, medium and large businesses. Taylor also defends the security and innovation of the proprietary development process against open source critics.

Microsoft and other proprietary vendors still have the advantage over open source in a couple of areas. Chief among them: marketing. Open source advocates are still somewhat clumsy about explaining the advantages open source technology. (Consider the slogan: "Free as in speech, not as in beer." What is that supposed to mean to the average person?) Microsoft and other proprietary vendors have a lot of money to pay skilled marketers to throw FUD at the problem.

Some open source advocates seem to want to put Microsoft out of business. But the better alternative is for both Microsoft and open source to be strong and locked into perpetual competition. Monopoly isn't good, even if it's our guys who have the monopoly.

New Linux Penguin Wallpaper - Just Too Darn Cute
So I get this e-mail the other day from a colleague at Network Computing magazine, suggesting that we promote their new Linux see-through penguin wallpaper. And I say to myself: "WALLPAPER! We are Serious By Gosh Journalists - there is NO ROOM on Linux Pipeline for FRIVOLITIES such as WALLPAPER! I'm going to Give Them A Piece Of My Mind, I will!"

And then I clicked on the link and said, "Aww, that's really cute. We ought to promote that."

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